Ok, so I get why Sony wouldn’t put Minidisc on the PSP. The original Atrac codec relies on some Dolby patents Sony was paying for, but I think they were already paying for a bunch of other licensing. Hi-MD was in consumer’s hands for roughly a year in the PSP launch time. I don’t think different parts of Sony were talking that well back then. I get the feeling UMD got used for company politics reasons. 

However, I still think the PSP would’ve been better with it. The UMD shells feel terrible years later. They still don’t feel as nice as any MD I’ve held. From what I've heard they did spec for a door on UMD, just never got around to it. I own scratched UMDs, a few of them I did myself. I’m sure a MD recording head would have increased thickness. However, I don’t think they would’ve had to make it a MD recorder, they could sell you expensive memory sticks for that. That said, Sony was all about multimedia devices that could do a lot of things (with their proprietary formats) so I could see them trying to fit a recording head into a PSP. Do I know if there is something else mechanically that made MD a bad format? No! Do I think Minidisc is cooler than UMD? Yes! Did someone at Sony probably go ‘but if we use the Music format for movies people would get confused’? Yes! Do I think any of that matters? Not really!

The real ‘Should’ve’ was to rush to get a digital games store working. I bought digital Wipeout Pure before the on-system store. One of the incentives to pirate was battery life. Everyone knew very early on the battery lasted longer loading off memory stick. Would it have stopped piracy? Heck no. People were getting poorer.